Correlation Between FFD Financial and Bank of Botetourt
Can any of the company-specific risk be diversified away by investing in both FFD Financial and Bank of Botetourt at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FFD Financial and Bank of Botetourt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FFD Financial Corp and Bank of Botetourt, you can compare the effects of market volatilities on FFD Financial and Bank of Botetourt and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FFD Financial with a short position of Bank of Botetourt. Check out your portfolio center. Please also check ongoing floating volatility patterns of FFD Financial and Bank of Botetourt.
Diversification Opportunities for FFD Financial and Bank of Botetourt
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FFD and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FFD Financial Corp and Bank of Botetourt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Botetourt and FFD Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FFD Financial Corp are associated (or correlated) with Bank of Botetourt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Botetourt has no effect on the direction of FFD Financial i.e., FFD Financial and Bank of Botetourt go up and down completely randomly.
Pair Corralation between FFD Financial and Bank of Botetourt
If you would invest 3,225 in Bank of Botetourt on December 4, 2024 and sell it today you would earn a total of 175.00 from holding Bank of Botetourt or generate 5.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
FFD Financial Corp vs. Bank of Botetourt
Performance |
Timeline |
FFD Financial Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Bank of Botetourt |
FFD Financial and Bank of Botetourt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FFD Financial and Bank of Botetourt
The main advantage of trading using opposite FFD Financial and Bank of Botetourt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FFD Financial position performs unexpectedly, Bank of Botetourt can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bank of Botetourt will offset losses from the drop in Bank of Botetourt's long position.FFD Financial vs. First Bancorp | FFD Financial vs. Triumph Financial | FFD Financial vs. Northeast Bancorp | FFD Financial vs. Greene County Bancorp |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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